Nonsense from John Petersen

[brianman]

Any tech that saves fuel / pollution is good.

No. Irradiating a continent to save fuel is not good. Spending a trillion to save 1 gallon of gas is not good.

Be careful with words like "any".

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If anyone is resorting to personal attacks, it's Peterson. How else would you interpret the comment from Peterson "everyone will realize the Iron Man is naked"? That sounds like jealousy of Elon's success.

I read it as a poor attempt to bring up "the emperor has no clothes". Trite, overused, etc.

 

[smorgasbord]

Petersen sums up his stand against Tesla in a recent SA comment (warning, clicking on that link will give Petersen one penny from some advertiser that doesn't know how to properly spend its money):

My position is very clear and very consistent. First, electric vehicles are a fraud when it comes to the claimed environmental and economic advantages. Second, even if the economics could work, the world can't produce enough critical technology metals to permit widespread implementation of electric drive without catastrophic disruption in several more critical markets for the same metals. Third, Tesla's business plan is deeply flawed and its financial statements are a train wreck. Fourth, that mathematically challenged ideologues and clean energy hucksters have painted such a pretty picture that the stock price that's hyped beyond all reason.

 

[NigelM]

Mod Note: Numerous posts went in different directions.....

AXPW-Investment-Discussion

ZEV-credits

snippiness [yet again....!]

 

[bonnie]

Petersen sums up his stand against Tesla in a recent SA comment (warning, clicking on that link will give Petersen one penny from some advertiser that doesn't know how to properly spend its money):

Because there has been some doubt/curiosity/challenge regarding payments of a penny/view, thought I'd provide the actual fact from the SeekingAlpha site:

 

[jeff_adams]

So how will Peterson spin the 1stQ report now? 12 cents a share profit is 3x higher than analyst predictions. Looks like the April fool is JP......

 

[gregincal]

So how will Peterson spin the 1stQ report now? 12 cents a share profit is 3x higher than analyst predictions. Looks like the April fool is JP......

He's going to say it's even worse than he predicted. His prediction was:

The two big drivers of Tesla's Q1 earnings will be:

• A one-time non-cash gain of $11 million arising from the reversal of a derivative warrant liability associated with the acceleration of Tesla's DOE loan; and
• An estimated $20 million in ZEV credits that have already saturated the market for 2013 and beyond, and effectively destroyed the value of future ZEV credits.
  When you eliminate the combined impact of the warrant liability reversal and the non-recurring ZEV credit sales, Tesla's Q1 net loss from recurring business activity will be about $30 million, as opposed to the anticipated GAAP net income of roughly $2 million.
  
  
  

In reality they had a GAAP income of $11 million and $68 million in ZEV credits. So if you eliminate the warrant liability and ZEV credits from the 11 million GAAP income you get a $68 million loss.

 

[Norbert]

However, a) those credits do exist (though we disagree with him on whether they exist for a good reason), and b) Tesla is prepared for their *future* decrease.

 

[ShortSlaver]

TSLA answered every questions regarding credits and in a satisfactory way. 25% margins by the end of the year, if not earlier, not including credits. Done and done. Stick a fork in it.

 

[jeff_adams]

I don't get the apologetic bent with the ZEV credits. That is how the game is played. You can only benefit if you sell lots of EVs. Tesla is doing that better than any one. That profit is as legit as any other profit.

 

[ShortSlaver]

I don't get the apologetic bent with the ZEV credits. That is how the game is played. You can only benefit if you sell lots of EVs. Tesla is doing that better than any one. That profit is as legit as any other profit.

Exactly. They are taking advantage of a tool that exists to inspire their work. Plus they know they will make even better margins without them. As far as I'm concerned, this battle is done. Tesla takes advantage of ZEV but won't need them to be profitable going forward as they've projected.

 

[kenliles]

Exactly. They are taking advantage of a tool that exists to inspire their work. Plus they know they will make even better margins without them. As far as I'm concerned, this battle is done. Tesla takes advantage of ZEV but won't need them to be profitable going forward as they've projected.

+1
In addition they will have them next year etc. to supply extra capital for ModX, GenIII reducing Cap raise needs etc.

 

[dsm363]

Peterson has shown he is little more than a noise maker with little credibility. What exactly about Tesla has he been right about in the last few years?

 

[JRP3]

I don't get the apologetic bent with the ZEV credits.

I do. The ZEV credits aren't popular with many people and Tesla doesn't want to appear dependent on handouts for their business model.

 

[jeff_adams]

I do. The ZEV credits aren't popular with many people and Tesla doesn't want to appear dependent on handouts for their business model.

Without penalties on emission, Californian cities would look like Mexico City or Bejing. It's not handouts, it's the standard every car maker should adhere to.

 

[JRP3]

I'm not criticizing the policies, just explaining why Tesla may not want to seem dependent on them, especially since they will decrease and go away.

 

[jeff_adams]

I'm not criticizing the policies, just explaining why Tesla may not want to seem dependent on them, especially since they will decrease and go away.

I'm not so sure they will go away. Maybe the cycle is for car companies to estimate the number of credits they will need for the year and purchase early to get a better price. They may not need to buy more at the end, but the cycle would start over next year. Car sales look to be up this year, so maybe Tesla can sell a few 4Q credits.

 

[blakegallagher]

I think it is a little premature to think they will go away too .... Now with a real supplier of ZEV credits maybe they will ramp them back up to the levels planned before California decided to "water them down"

 

[jeff_adams]

I think it is a little premature to think they will go away too .... Now with a real supplier of ZEV credits maybe they will ramp them back up to the levels planned before California decided to "water them down"

CARB kept caving in to the poor automakers that cried "nobody wants to buy electric vehicles. We don't have the technology to produce high MPG or low emissions". CARB can now tell them that is BS. Either build cars that compete with Tesla or buy their credits, your choice

 

[vfx]

Amazing how car makers switched from "No one wants Evs" to "Tesla is making too many EVs that people want" (of course they don't use the "that people want part".)

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I think it is a little premature to think they will go away too ....

I just think it's the first part of an underpromise an overdeliver statement. Plus a bit of softening the new criticisms that are coming out about ZEV credits by saying this is just a shot term advantage they are getting.

 

[smorgasbord]

Here are some quotes from Petersen's comments today:

From here (no money to Petersen if you click):

Tesla reported $11.2 million in income including:

$10.7 million in nonrecurring gains from reversing derivative liability;
$68.0 million in nonrecurring ZEV credits; and
$6.4 million in nonrecurring foreign currency benefits.

Musk will be guiding substantial losses for Q2 and Q3, with a modest income for Q4 (maybe).

I wouldn't write those puts off yet, although the fanboys may be too busy cheering to hear what Musk actually says.

And from here (this DOES give money to Petersen):

That GAAP income includes:

$68 million in ZEV credits that will fall to zero by Q4
$11 million of warrant derivative gains
$7 million of foreign currency translation.

In other words they lost about $70 million from making and selling cars.